Cisco CEO John Chambers, shown at a mobile show in Spain this year, sees improvement in U.S. business. AP View Enlarged Image

Cisco's stock was up 7% after hours, after the company released results for its fiscal Q1 ended Oct. 17. The stock fell a fraction in the regular session, closing at 16.85. Shares are down 11% since Aug. 16, when a Q4 earnings beat sent the stock up nearly 10%.

As it has done in recent quarters, Cisco achieved growth in small but promising areas such as mobile, security and data center gear, while its core networking switches and routers fell.

Cisco is holding its own in an uncertain economy, says John Slack, an analyst for Caris & Co.

"Competitively, they are doing all right," Slack told IBD. "But that doesn't get away from the fact the economy is terrible, and if you have got EMC (EMC), IBM (IBM) and Juniper (Networks) (JNPR) — all of its big peers — guiding down numbers, Cisco is pretty much in the same boat."

Cisco reported Q1 earnings per share minus items of 48 cents, up 12% from the year-earlier quarter and 2 cents ahead of the consensus estimate of analysts polled by Thomson Reuters.

For the current quarter, Cisco says it expects EPS minus items of 47 or 48 cents, vs. 48 cents a year ago. Analysts had forecast 47 cents.

The San Jose, Calif.-based company said it expects revenue of $11.93 billion to $12.16 billion, up 3.5% to 5.5%. The midpoint of $12.05 billion beats analyst forecasts of $12.01 billion.

"While we feel very good about our performance and our opportunity, we all understand the uncertainty in the current macroeconomic environment," Cisco CEO John Chambers said on a conference call with analysts. "Specifically, we are modeling Europe to get worse before it gets better.

"We see signs of improvement in the U.S. in both enterprise, service provider and commercial. Unfortunately, it's still too early to call this a trend."

The company reported flat sales from Europe, the Middle East and Africa, at $2.841 billion from $2.845 billion a year earlier. America's revenue rose 6.5% to $7.02 billion, while Asia rose 10% to $2.01 billion.

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